This article also appeared in Finweek Magazine in their 04-July-2013 issue

Executive Education is an industry undergoing a lot of change. What developments and trends are shaping the industry, both in South Africa and abroad? And how are South Africa’s business schools responding to these challenges? We spoke to experts on the ground at local business schools to answer these questions.

But first, what is executive education?

Often loosely referred to as exec. ed., this is the umbrella term for academic programmes that business schools provide for executives, business leaders and managers. These typically don’t earn attendees a degree or credits. Exec. ed. programmes usually involve costly business school faculty and impressive facilities, with highly paid executives attending. So they don’t come cheap. For many business schools, exec. ed is their bread and butter.

How did exec. ed. come about?

Many trace it back to Frederick Taylor’s ground-breaking book “Principles of Scientific Management”. Way ahead of his time in 1911, Taylor applied the scientific method to the management of workers in order to boost their productivity tremendously. Soon after, MIT’s Sloan School of Management started running Engineering Administration. At that time, providing business training in an academic setting was becoming more and more popular. This prompted MIT to develop a programme “specially designed to train men to be competent managers of businesses that have much to do with engineering problems.” Towards the end of the 1920s Harvard also began running short courses of MBA material. Fast-forward to the 80’s and 90’s, when employees needed higher levels of education to cope with the faster pace and scope of international business. Agility became key to success during the dot-com era, when fortune favoured companies and workers that could respond rapidly to change. As age-old business concepts became outdated, continual business training became vital – but getting a degree was not. This was a big driver for the tremendous growth of the exec. ed. industry. In 2001, Business Week magazine estimated that exec. ed. in the U.S. was worth roughly $800mil per annum. Fast forward to 2011, when U.S. corporate training groups spent $67bil.

What developments and trends are shaping the industry, both in South Africa and abroad? This is what local industry experts had to say:

1. The move away from generic training, towards customised, company-specific programmes: According to Linda Buckley, Director of Executive Education at UCT’s Graduate School of Business (GSB): “Currently organizations are looking for customized solutions to their training needs – essentially getting a hugely relevant, immediately implementable and highly effective bang for their buck. Companies are opening their doors to us and asking us to truly understand their environment before embarking on a programme design. [It is] an invitation into the private workings and engine rooms of all sorts of organisations – large and small – in order to offer back to them the most cutting-edge trends in thought leadership pertinent to their own work context. Their return on investment is almost a given, and will only increase with time as executives keep on reflecting and trying again. The value that the application of their learnings offers, is immeasurable. Workbased learning allows for theorizing, contextualising and practicing IN the ideal incubator – their own workplace.” Buckley’s view on the move towards customisation is widely shared by other experts in the industry. These include Director of Executive Education Adam Gordon at Wits Business School (WBS), and Danie Jacobs, Head of the Centre for Business Dynamics at UFS Business School.
2. The online revolution. The traditional education industry worldwide is feeling the disruptive influence of the internet. For example, Khan Academy is reinventing school-level education, while tertiary education is being disrupted by Mass Online Open Courses (MOOCs), with over 100,000 learners per course, in some cases. In the exec. ed. industry, we have witnessed markedly less of an online onslaught. Some feel it is because exec.ed. is a “high touch” space that doesn’t cross over easily to online. Morten Hansen, professor at Berkeley and Insead, believes otherwise. In his words: “[Exec. ed.] too will disrupt; it’s just lagging the rest.” According to Linda Buckley at UCT GSB: “The advent of online learning and increasing accessibility of technology (including cellphone technology) to the world’s population – is set to change the learning landscape forever. What will set us apart from the competition, in this sphere, is the manner in which we are able to support, motivate and ensure retention of online (‘unknown’) learners, in addition to ensuring our learning methodologies are innovative, yet remain robust and globally relevant – as audiences are no longer limited to a certain population of people in one room.”
3. The rise of blended learning. This is a formal education programme so-called because it is a blend of traditional face-to-face classroom training with online learning, sometimes with mobile learning also thrown in the mix.
4. Use of technology in education. We’re seeing it everywhere. “Whether it is hardware in the form of tablets, smartphones and laptops, infrastructure in the form of internet access, or software in the form of applications, business tools and video content, democratization of information is a key trend.” So says Shaun Rozyn, Executive Director of Executive Education at the Gordon Institute of Business Science (GIBS).
5. Worldwide we’re seeing a dramatic shift towards cheap or free training. Founded by Stanford professors Andrew Ng and Daphne Koller, Coursera is a revolutionary educational technology company that allows you to take high-quality collaborative courses online for free. They offer 300+ MOOCs developed by 62 universities from 16 countries. Coursera’s aim? To make education a fundamental human right for everyone worldwide. They’ve partnered with 83 international institutions like Yale, Duke University and Stanford; however they don’t seem to have any South African partners yet. With Coursera’s technology, their partners can teach millions of students instead of hundreds. Over 3mil people have signed up. With Coursera offering free business training courses for company staff, it’s a matter of time before their model starts to erode the pricey exec. ed. space and the revenue that it generates for business schools.
6. The birth of open source learning. Open source has morphed beyond software development into open exchange, community and collaborative participation in the education industry. Coursera’s MOOCs are a prime example. In the words of Prof Helena van Zyl, Head of UFS Business School: “Internationally, executive education is increasingly shaped by open source learning. Many international institutions of note offer open source learning opportunities.” However, as Adam Gordon of WBS points out, “MOOCs have a very high drop-off rate, with less than 1% of entrants making it to the exam”. This could be a barrier to their uptake in corporates, where executives want to see real returns on their investment in training.
7. The move out of the classroom to on-site learning, closer to the real issues that companies experience. “The fields of exec. ed. and strategy consulting are coming together.  We’re seeing integration of exec. ed. with the real issues that companies have”, says WBS’ Adam Gordon.
8. Learning by doing. According to Linda Buckley of UCT GSB: “Exec. ed. is moving away from transmission style teaching to adults learning by doing, particularly on leadership programmes where role-play, simulations and action learning are becoming the order of the day; but also on short interventions such as a four-day finance course.” Danie Jacobs of UFS Business School agrees. In his words: “Practical application and action-based learning are essential.” This ties in with the shift to the 70-20-10 learning and development model. According to this, 70% of learning and development comes from real-life and on-the-job experiences, tasks and problem-solving, 20% comes from feedback and watching and working with role models, with only 10% stemming from formal training.
9. The requirement to justify ROI and company spend. It is no longer simply about passing a course and getting the certificate. According to Danie Jacobs of UFS: “Companies want to see immediate return on their investment.” Adam Gordon of WBS agrees.
10. More competition in the exec. ed. space. Not only are business schools playing in this space, but we’re also seeing colleges and other institutions offering exec. ed., says Adam Gordon.
11. Training in economic downturns. When the economy takes a knock, like it did during the global financial crisis, company training often gets cut. According to Shaun Rozyn of GIBS, in recessions, training is often brought in-house; this allows executives to teach staff and to use the classroom to engage and communicate on key focus areas of the business. However, as UCT GSB’s Linda Buckley highlights, rather than cutting down on training, an economic downturn is actually the ideal time to train and engage a workforce to ensure they are prepared (up-skilled and competent) for the next economic upswing.

Are the trends in the South African exec ed. industry mirroring the international trends?

Yes, says Linda Buckley: “I don’t see a major divide between local and international trends – when visiting foreign countries and continents, [I see] that many of the issues facing executives today are ‘generic’. It is often just the context that changes and nuances the solutions to these problems.” Although Adam Gordon agrees, in his view there are also some uniquely African trends emerging. He is seeing an Africa market push, with more money being spent on training in this area, to meet business’ greater need.

How are SA business schools responding to these challenges?

Danie Jacobs of UFS Business School says: “We are moving away from generic short certificate programmes toward in-house solutions tailor-made to the clients’ needs. These interventions also coincide with consultative interventions.”

At UCT GSB, Buckley highlights their key developments, including:

1. “A free-for-all online learning platform, with an optional paid exam written at the end to graduate with a certificate; and
2. Improving their e-learning platform (and virtual library) to ensure the relevant support is available to keep students on board – when back in the workplace around the globe.”

According to Adam Gordon, WBS has built a Leadership Development Centre, providing cutting-edge executive learning and creating leaders. They are also doing more blended learning out of the classroom, integrated with real projects, and are working towards a mix of online and offline learning.

At GIBS, they have a Personal and Applied Learning unit to support their lecturer material with business improvement coaching, executive mentoring and business-driven action learning. The greater learning process has improved the application of knowledge in the workplace and business impact by up to 55%, Shaun Rozyn says. To reduce their clients’ costs and time away from the office, GIBS offers focused “Strategic conversations”. These 3-hour business education sessions combine faculty knowledge with an integrator that extracts the key learnings for the executive team. GIBS has created a Technology Enabled Learning unit to source world-class applications and tools that help faculty, coaches and learning designers maximize contact time for discussion, facilitation and group work, rather than teaching. GIBS has also built an Innovation Lab which uses whole-brain thinking to help teams with strategy formulation, structural design, process reengineering or cultural change. Leading companies such as Multichoice, KPMG and Coca-Cola have used the Lab to re-envision aspects of their business. GIBS also offers the iGIBS free learning platform.

And how are South African business schools responding to the MOOC revolution? A definitive strategy on this seemed to be conspicuously absent at many of the local business schools. However, WBS’ Adam Gordon points out: “WBS are not getting into MOOCs. We anticipate this will play at the bottom end of the market, whereas WBS plays at the middle and top end. However, in the future, we could incorporate a MOOC into some of the project courses.”

Executive Education is an industry in flux. South African schools are embracing some of the major trends, but not all. Will they be ready for the wide-scale disruption that many experts predict for the education industry? We’ll have to wait and see.